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Investing.com -- Kepler Cheuvreux has upgraded Bayer’s stock to “buy,” citing improved legal clarity and stronger earnings forecasts despite maintaining a target price of €33.
The upgrade follows a review of Bayer’s litigation risks and operational performance. Analysts reported that a substantial portion of litigation risk, particularly related to glyphosate and PCBs, has already been reflected in the share price.
The brokerage increased its litigation risk cushion from €10bn to €15bn but left the valuation target unchanged.
Bayer’s stock was last quoted at €26.49, with an estimated upside of about 25% based on the target.
The market capitalization stands at €26.0bn. Year-to-date performance shows a 31.7% increase, with a 52-week trading range between €18.87 and €30.45. The stock has a 100% free float and an average daily trading volume of €182.2m.
The report noted that litigation remains a major theme in Bayer’s outlook, particularly with ongoing cases related to Monsanto (NYSE:MON).
However, analysts stated that the likelihood of an extreme negative outcome has already been priced in.
On the operational side, Bayer’s earnings forecasts for 2026 and 2027 were revised upward by 8% to 10% above consensus.
The company reported 2024 sales of €46.36 billion, with projections of €50.42 billion in 2026 and €51.32 billion in 2027.
Adjusted EBITDA is expected to increase from €9.51 billion in 2024 to €14.16 billion by 2027. Net profit is projected to rise from €2.50 billion in 2025 to €5.75 billion in 2027.
Adjusted earnings per share (fully diluted) are forecast to grow from €4.41 in 2024 to €5.85 in 2027. Free cash flow is also expected to strengthen, reaching €4.44 billion in 2027, up from €2.04 billion in 2024.
Dividend per share is projected at €1.80 by 2027, up from €0.41 in 2024, translating to a dividend yield increase from 0.4% to 6.8%.
Bayer’s Crop Science division remains a central focus, with the company described as a global leader in crop protection and digital innovation.
The brokerage also noted progress in the Pharmaceuticals segment, including Eylea 8mg and other products in development. The Consumer Health portfolio was characterized as a source of stable earnings.